On December 19,2019,Acme Inc.,an accrual basis corporation,accrued $50,000 compensation expense for a routine year-end bonus payable to Mrs.Tabor,who is Acme's CFO.Acme paid the $50,000 to Mrs.Tabor on January 15,2020.Which of the following statements is false?
A) If Mrs.Tabor owns no stock in Acme (i.e.is not a related party) ,Acme can deduct the accrued expense in 2019.
B) Mrs.Tabor includes her $50,000 bonus in 2020 gross income.
C) If Mrs.Tabor owns 75 percent of Acme's stock (i.e.is a related party) ,Acme can't deduct the expense until 2020.
D) If Mrs.Tabor owns 75 percent of Acme's stock (i.e.is a related party) ,Acme can never deduct the bonus expense.
Correct Answer:
Verified
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